Background
Professional football in the United States has experienced its share of highs and lows. Despite how popular it has been globally, soccer is still quite unpopular in the United States. The original NASL lasted between 1968 and 1984. During this period, usually referred to as the golden era, high-level soccer was introduced to North Americans by world-class players that included famous soccer players such as Johan Cruyff, George Best, Pele, and Eusebio. This original North American Soccer League comprised Canada and the United States teams and operated between 1968 and 1984. Between 1975 and 1983, the league was referred to as the Soccer Bowl before it was referred to as the Soccer Bowl Series in 1984. The league’s popularity peaked in the late 1970s when it averaged more than 13000 fans for each game. While the league appealed to the majority of foreign talents, the league failed to appeal to the locals, and the league saw it wise to make it more appealing to the North Americans who felt like it was foreign to them. One of NASL’s major successes was introducing soccer to most North Americans, but it still failed to convince North Americans to fall in love with the sport. However, the biggest success story is that it contributed to the 1994 world cup hosting rights awarded to the United States (NASL, 2022). The death of NASL introduced the MLS, which has existed to date. However, the MLS has still failed to make soccer popular amongst Americans. When David Beckham was signed to the MLS in 2007, there were several criticisms on MSL, citing that this was a failed marketing tool similar to the NASL’s and failed to capture Americans’ interest (Francis & Zheng, 2010). Identifying the failures from previous attempts to make soccer a popular sport in the United States can be used as a first step in identifying if professional women’s soccer could be popular in the United States. Competitive analysis is important because it can help enhance a proper business strategy for the professional women’s league. By looking at the failures and successes of the business strategy in the men’s league, a proper analysis of the feasibility and the viability of the professional women’s league can be obtained. The competitive analysis also provides a proper view of the competition and what to expect as a potential entrant in the market.
Discussion
Before formulating a strategy, any organization needs to analyze the external and internal environments. After Michael Porter developed the Five Forces analytical model, this viewpoint became even more relevant. Porter’s model was introduced to make it easier for organizations to understand competitive market forces in every industry with the potential of affecting them and their operations. The five forces by porter include; supplier power, buyer power, threats by substitutions, competition by rivals, and threats by new market entrants. These five forces, developed by Michael Porter in 1979, were “a simple framework for assessing and evaluating a business organization’s competitive strength and position” (CGMA, 2013).
The threat of New Entrants
The first of the five forces is the threat of new entrants into the market. Whenever a market is profitable, it attracts new entrants, which might affect the profitability of market players. Unless the incumbent market players have strong barriers to entry, then there is a chance that profitability will decline to competitive rates. The analysis of this force looks at the potential of having new entrants in the market and how the market will react towards any new entrants. In addition, this force analyzes any potential barriers that the organization might face if they try to enter into the market (Boyd, 2008). Before setting up a professional women’s team in Tennessee, an analysis of the existing barriers to entry and how the market reacts to new entrants has to be developed. Developing an understanding of the barriers to entry will help identify the viability and feasibility of Tennessee’s professional women’s team.
The Power of Consumers
This force analyzes how easy it is for consumers to affect market prices. Consumer power is driven by the number of consumers in the market, how important each consumer is to the organization, and how easy it is for consumers to shift from one producer to another (Boyd, 2008). An industry with very few powerful buyers would allow the business to control prices and increase its profits. The power of consumers depends on other factors such as the cost of materials and the degree of product differentiation. For example, a women’s soccer team in Tennessee might not have many consumers and might not be too different from the men’s soccer team. Therefore, it might prove difficult for the women’s soccer team to attract consumers who prefer the men’s soccer team. Since soccer is not a popular sport either, the number of consumers will not be as high as expected.
The Power of Suppliers
This assessment of how suppliers can affect market prices. The power suppliers in a market possess is usually determined by the number of suppliers in the market for each input, the uniqueness of the product or service, the suppliers’ size and strength, and the cost incurred when switching from one supplier to another. In addition, the powers of suppliers determine whether suppliers or organizations hold power within the industry. Other factors that determine the power of suppliers include; concentration of suppliers and degrees of product differentiation by the suppliers in the industry. For example, the Tennessee women’s football town is a new entrant to the market; therefore, there is a higher supplier power in the industry.
The Threat of Substitution
The threat of substitution analyzes the effects of existing substitutes on the industry. Substitution threat can emanate from product to product substitution or from the need to do with or to do without (Boyd, 2008). In a market with close substitutes, consumers will likely switch to alternatives when prices increase. For example, there are so many other close substitutes in the sports market, and consumers might be willing to stop watching women’s soccer teams whenever prices for tickets increase. Close substitutes, in this case, reduce the attractiveness of the market.
Competitive Rivalry
This force focuses on how the other forces impact rivalry in a market situation and the extent of direct rivalries between the competitors (Boyd, 2008). This force also shows how much competitive rivalry exists in the industry following the levels of diversity of the competitors to the costs and growth and costs that are associated with the industry. For example, a professional women’s team in a limited market as the American sports market will experience competitive rivalry from other sports such as baseball and men’s professional soccer.
Conclusion/ Recommendation
Considering that soccer in the United States is not as popular as other sports such as baseball, it would be difficult to enter into a market with very few consumers. In addition, the presence of other substitutes such as baseball and hockey that are more popular than soccer will make this business idea less feasible. Therefore, the recommendation is that investing in a more popular sport other than soccer would make more business sense than investing in soccer.
References
Boyd, F. (2008). Failure to Launch: A study into the North American Soccer League and the Women’s United Soccer Association and their factors of failures through Michael Porter’s Models of Strategy Formation. University Of Tennessee – Knoxville, 8. https://trace.tennessee.edu/cgi/viewcontent.cgi?article=4989&context=utk_gradthes.
CGMA. (2013). Porter’s Five Forces of Competitive Position Analysis. CGMA. Retrieved from https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html.
Francis, J., & Zheng, C. (2010). Learning Vicariously From Failure: The Case of Major League Soccer and the North American Soccer League Collapse. Group & Organization Management, 35(5), 542-571. https://doi.org/10.1177/1059601110383405
NASL. (2022). NASL 1968-1984 | NASL. Nasl.com. Retrieved from http://www.nasl.com/a-review-of-the-golden-era.
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